DECISION MAKING PROCESS

PROF. MANU PRIYA GAUR manupriya@imi.ac.in

What is Opinion Leadership? Opinion leaders
filter, interpret or provide information for individuals within groups Situations in which opinion leadership occurs:
one individual exchanges

information with another one individual volunteers information as a by-product of normal group interaction

" Word of mouth is the business world's equivalent of gossip ; which may explain why it is so likely to be repeated when it is negative ." - Chip Walker

DECISION MAKING PROCESS

CONSUMER

Consumer DecisionMaking Process
A five-step process used by consumers when buying goods or services.

Types of Consumer Choices
Six Generic Consumer Behavior Choices:
Product 2.Brand 3.Shopping area 4.Store type 5.Store 6.Nonstore source (catalogs, PC, & TV shopping)
1.

Decision Making Process

Consumer Decision-Making Process
Need Recognition Need Recognition

Information Search Information Search Cultural, Social, Cultural, Social, Individual and Individual and Psychological Psychological Factors Factors affect affect all steps all steps

Evaluation Evaluation of Alternatives of Alternatives

Purchase Purchase

Postpurchase Postpurchase Behavior Behavior

Need Recognition
Result of an imbalance between actual and desired states.
Marketing helps consumers recognize an imbalance between present status and preferred state

Internal Stimuli and External Stimuli
Preferred State

Present Status

Stimulus

Any unit of input affecting one or more of the five senses: Sight, Smell, taste, touch, hearing

Want

Recognition of an unfulfilled need and a product (or attribute or feature) that will satisfy it.

Recognition of Unfulfilled Wants
When a current product isn ’ t

performing properly out of a product

When the consumer is running When another product seems

superior to the one currently used

Information Searches
Internal
Process of recalling past information stored in the memory. Process of seeking information in the outside environment.

External

Internal Information Search uRecall information in memory

External Information search uSeek information in outside environment uNon-marketing controlled uMarketing controlled

Evoked Set

Group of brands, from which a buyer can choose.

resulting from an information search,

Evaluation of Alternatives

Evoked Set
Analyze product attributes Analyze product attributes

Use cutoff criteria Use cutoff criteria

Rank attributes by Rank attributes by importance importance

Purchase

To buy or not to buy...
Marketing

Determines which attributes are most important in influencing a consumer’s choice

Cognitive Dissonance
Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

Postpurchase Behavior
Cognitive Dissonance
Marketing

Did I make a good decision? Did I buy the right product? Did I get a good value?

?

Can minimize through: Effective Communication Follow-up Guarantees Warranties

Five Factors Influencing Decisions
1. 2. 3. 4. 5. Level of consumer involvement Length of time to make decision Cost of good or service Degree of information search Number of alternatives considered

High-and Low-Involvement Decisions
High-involvement Decisions: Characterized by high levels of

importance thorough information processing, and substantial differences between alternatives.

Low-involvement

Decisions: Occur when

relatively little personal interest, relevance, or importance is associated with a purchase.

Input

Firm’s Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channels of distribution

Sociocultural Environment 1. Family 2. Informal sources 3. Other noncommercial sources 4. Social class 5. Subculture and culture

External Influence

Process

Consumer Decision Making

Need Recognition Prepurchase Search Evaluation of Alternatives

Psychological Field 1. Motivation 2. Perception 3. Learning 4. Personality 5. Attitudes Experience

Output

Purchase 1. Trial 2. Repeat purchase Postpurchase Evaluation

Figure 1-1: A Model of Consumer Decision Making

Post-Decision Behavior

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